California Financial Regulator Warns of 7 New Types of Crypto, AI Scams
The California Department of Financial Protection and Innovation (DFPI) has issued a stern warning to users of cryptocurrency platforms, highlighting seven new types of scams that have emerged in the state. The regulator received over 2,668 complaints in 2024, with seven previously unknown types of scams reported by victims.
New Types of Crypto Scams
The DFPI has identified seven new types of crypto scams that it did not previously have on record. These include:
- Fake Bitcoin (BTC) mining schemes, where fraudsters offer fake investments in mining operations, promising unusually high returns.
- Crypto gaming schemes, where users are encouraged to deposit funds only to have their wallets drained by scammers.
- Fake job scams, where victims are offered cryptocurrency-related employment opportunities that require them to transfer crypto and provide private information.
- Airdrop scams, where victims are tricked into revealing their private keys through fake airdrops that promise unusually high rewards.
- WhatsApp or Telegram-based investment group scams, where victims are lured into investing in fake groups promising unusually high returns.
- Ai Investment scams offering unusually high returns and losing their crypto after interacting with certain sham websites.
- Crypto recovery scam sites, where scammers promise to recover stolen crypto but instead steal more funds from victims.
AI-Driven Scams on the Rise
The growth of the AI industry in 2024 has led to a rise in AI-driven scams. According to Precedence Research, the market cap of the AI industry reached $638 billion last year. The DFPI Commissioner KC Mohseni warned that users should be cautious when interacting with unknown platforms and verify website domains to avoid fraudulent imitations.
Crimeware-as-a-Service on the Rise
The rise of crimeware-as-a-service (CaaS) has also been a significant trend in 2024. Experienced hackers and cybercriminals are selling their tools and services to less experienced offenders for a price, making it easier for scammers to launch complex attacks.
California DOJ Takes Down 42 Crypto Scam Websites
The California Department of Justice (DOJ) took down 42 crypto scam websites in 2024 that stole $6.5 million from victims. The average loss per person was $146,306. International fraudsters often carry out scams, making it difficult for law enforcement to prosecute and arrest them.
Common Threads Among Scam Websites
Common threads among the scam websites included promises of high returns, no contact information, offers of prizes for signing up, and no listings on legitimate crypto industry websites such as CoinMarketCap. The California DOJ urged users to be cautious when interacting with unknown platforms and to verify website domains to avoid fraudulent imitations.
Industry Losses Mount
A report from Cyvers identified pig butchering schemes as one of the most costly scams in 2024, estimating that the scam cost the industry over $5.5 billion across 200,000 identified cases. Meanwhile, blockchain security firm CertiK's annual Web3 security report flagged crypto phishing attacks as the most significant security threat of 2024, with users losing an estimated $1 billion across 296 incidents.
Stay Safe
User safety is paramount when it comes to cryptocurrency and AI. The DFPI Commissioner KC Mohseni urged caution and vigilance when interacting with unknown platforms, emphasizing the importance of verifying website domains and staying away from scam sites. By being aware of these new types of scams and taking steps to protect yourself, you can minimize your risk and stay safe in the world of cryptocurrency and AI.